EnviroGold (Las Lagunas) Limited v. Dominican Republic
ICSID · Investment (ICSID and treaty) · Dominican Republic · 30 Apr 2024
Why it matters
This case illustrates the limits of contractual claims against a host state in ICSID Additional Facility arbitration, particularly where the claimant's own voluntary decisions undermine its damages claim. The tribunal's rejection of the principal claim and award of costs to the state reinforces the importance of causation and voluntary conduct in contract-based investment disputes.
Summary
EnviroGold, an Australian mining company, brought an ICSID Additional Facility arbitration against the Dominican Republic in 2020 over a 2004 contract for an environmental remediation project at the Las Lagunas tailings dam. The project involved removing gold tailings, reprocessing them, and remediating the dam. EnviroGold claimed the government failed to provide an alternative site for a new dam when the original site became unavailable, causing over US$15 million in additional costs. The tribunal dismissed this claim, finding that EnviroGold voluntarily decided to re-deposit tailings in the existing dam regardless of the government's obligation. EnviroGold also claimed the government breached a tax exemption clause and improperly levied penalties on royalty payments, seeking a declaration that it owed no further royalties. The tribunal awarded only US$3 million on this tax claim and refused the declaration. The Dominican Republic was awarded over US$2 million in legal costs, leaving EnviroGold nearly empty-handed and still owing significant amounts under the contract. The arbitration was seated in Washington, D.C., governed by Dominican law, and heard under the ICSID Additional Facility Rules.
The detail
Parties: EnviroGold (Las Lagunas) Limited v. Dominican Republic
Case number: ICSID Case No. ARB(AF)/20/1
Outcome: Tribunal dismissed EnviroGold's claims in full except for US$3 million on tax claim; awarded Dominican Republic over US$2 million in costs.
Quantum: US$3 million
Applicable law: Contract signed in 2004; Dominican law; ICSID Additional Facility Rules
Issues in play: Contract interpretation regarding government's obligation to provide an alternative site for a new tailings dam; tax exemption clause and royalty payment penalties.
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